Dow closes 200 points higher as major banks pop on stress test results, GDP revised upward: Live updates

JPMorgan Chase and Goldman Sachs each rose more than 3%, while Wells Fargo advanced 4.5%. The action came a day after the central bank said all 23 institutions included in its annual stress test are well capitalized to weather a severe recession scenario. Other financial stocks that took a hit during this year’s banking crisis also gained, including Charles Schwab, Western Alliance and Zions Bancorporation.

A slate of positive economic data signaled economic resilience despite looming recession fears. That included a large upward revision in first-quarter GDP and a drop in weekly jobless claims to the lowest level since May.

“Sectors that do well when the economy is performing well are holding up today, but certainly the stress tests yesterday were another good sign that even if the economy softens, banks are much more resilient than what we saw back in the 2008 period,” said Edward Jones senior investment strategist Mona Mahajan.

It has been a banner first half, and Friday marks its final trading day. The S&P 500 is up 14.5% this year and on pace for its best monthly performance since January. The tech-heavy Nasdaq has climbed nearly 30% and is heading toward its best first half since 1983 as rising optimism around artificial intelligence pushes up technology stocks. The blue-chip Dow is the relative underperformer, up just 2.9%.

Despite the solid start to 2023, some on Wall Street are bracing for a potentially volatile second half.

“Markets don’t go up in a straight line forever, and so, we wouldn’t be surprised to see some period of consolidation,” as Wall Street takes some profits, Mahajan said. Investors should consider using volatility to position for a broad-based recovery, she added.

Lee este artículo en español aquí.